18% GST applicable to Job Work Service to Foreign Customer

The Andhra Pradesh Authority of Advance Rulings in an application filed by M/s. Synthite Industries held that the process of providing job work service to foreign customer is taxable at 18% under the Andhra Pradesh GST Act.
HTH Hamburger Teehandel GmbH lm. & Export, Hamburg is a foreign company which entered into an agreement with the applicant job worker for the work of processing Tea, the other way round called removing Caffeine from Tea. The raw material/ packing material is supplied by the foreign Principal and after the process has been undertaken, the de-caffeinated tea will be exported to the Principal. The applicant sought for a ruling on whether the process of providing job work service to foreign customer is taxable under GST. The Authority referred to Section 2(68) of the Central Goods and Service Tax Act, 2017 (CGST) defining ‘Job Work’. It is ‘any treatment or process undertaken by a person on goods belonging to another registered person’. Further, the one who does the said job would be termed as a ‘Job Worker’. Also, the ownership of the goods does not transfer to the Job Worker but it rests with the Principal. The Job Worker is required to carry out the process specified by the Principal, on the goods.
The bench constituting of Sri. J.V.M. Sarma and Sri. Amaresh Kumar as members held that the process of providing ‘Job Work’ service to the foreign customer as in the present case in the premises of the applicant as per the specifications of the recipient of services is taxable under the Andhra Pradesh GST Act at a rate of 18%.